Offshore trusts are a popular mechanism for foreign investment due to the low tax jurisdictions such as Guernsey, Jersey and Mauritius that are ideal hosts for such trusts. It is of utmost importance to decide where the Trust will be formed, as Trusts are taxed in accordance with the laws of the country they are formed in, or in the place of effective administration of the Trust.

As a Trustee you are obligated by law to ensure that a trust is fully complainant with SARS to avoid penalties, interest and in some case criminal sanctions being imposed. As a result of the financial effects of the Covid-19 pandemic, the tax base is shrinking and SARS is required to collect more revenue. On 5 May 2020, the Commissioner categorically stated that that no stone will be left unturned in pursuit of non-compliant taxpayers.

It is clear that SARS will be aggressively collecting all outstanding tax debts on an unprecedented scale and the tax compliance in respect of Trusts is critical, more so in the current taxation climate than ever before.

Should you be a Trustee of a non-compliant Trust, it is far better to approach SARS to regularise the tax affairs of the Trust before SARS catches wind of your non-compliance. Interest and understatement penalties may be levied up to 200% of the understatement.

Depending on your compliance needs, we can set-up, and assist with the administration of any vehicle or instrument that you may require, whether local or foreign. Further to the above, any existing documentation specific to a trust shall be assessed from a tax and legal perspective, with particular focus on the Income Tax Act 58 of 1962, the Tax Administration Act 28 of 2011 and the Trust Property Control Act 57 of 1988.

This may include assisting with vetting or sign-off of trust deeds, dealing with complex share structures and resultant agreements, sign-off on tax planning or compliance, accounting and related secretarial support services not offered by the bank. Where substandard tax advice has been provided on the workings of trusts, we provide advice for the correct structuring and compliance of these entities.

Our multidisciplinary team of tax attorneys and chartered accountants follow a strict legal and compliant approach with solution-based thinking. Working with our attorneys also guarantees full legal professional privilege on your matter.